What Goes in a Fintech Partner Compliance Review

A fintech partner compliance review is not a check-the-box exercise, it is the mechanism through which a sponsor bank demonstrates active oversight of the products and services delivered under its charter. Examiners don't just ask whether reviews happen. They ask what the reviews cover, what the bank found, and what it did about the findings.

The scope of a fintech compliance review should cover every area where the fintech's activities create regulatory exposure for the bank: BSA/AML controls, consumer compliance, complaint handling, marketing and disclosures, data security, and operational performance. Each area has specific review procedures, and the results should feed directly into the bank's risk assessment and monitoring cadence for that partner.

Key Takeaways:

A fintech compliance review must cover BSA/AML, consumer compliance, complaints, marketing, data security, and performance metrics, not just one or two areas
Review scope and frequency should be risk-based, with high-risk programs reviewed more frequently and in greater depth
Findings must be documented with remediation plans, deadlines, and follow-up verification
The review should produce a written report with a risk rating that informs ongoing monitoring intensity

Defining Review Scope and Frequency

Not every fintech partner review needs to cover every area in equal depth every time. The bank should define a review calendar that balances thoroughness with practicality:

Comprehensive annual review. Once per year, conduct a full-scope review covering all areas below. This produces the annual risk rating for the partner and informs the next year's monitoring plan.

Targeted quarterly reviews. Each quarter, focus on one or two high-risk areas. Rotate focus areas so that over the course of a year, every area receives at least one targeted review in addition to the annual comprehensive review.

Continuous monitoring. Certain activities, complaint volumes, transaction monitoring alerts, marketing publication, should be monitored on an ongoing basis, with monthly or weekly data pulls depending on volume.

The frequency should escalate based on risk indicators. If a fintech partner's complaint rate spikes, shift from quarterly to monthly complaint analysis. If transaction monitoring triggers increase, add an interim BSA review. The monitoring cadence table in our guide on managing fintech partner compliance at scale provides a risk-tiered framework.

BSA/AML Controls Assessment

The BSA/AML review is typically the highest-priority component. Examiners will ask specifically about the bank's oversight of fintech-originated BSA obligations. The review should cover:

Customer due diligence (CDD). Pull a sample of accounts opened through the fintech and verify that CDD was performed to bank standards. Check that: identity verification meets the bank's Customer Identification Program (CIP) requirements under 31 CFR § 1020.220; risk ratings were assigned at onboarding; enhanced due diligence was applied to higher-risk customers; and beneficial ownership information was collected where required under 31 CFR § 1010.230.

Transaction monitoring. Evaluate whether the bank's transaction monitoring system covers fintech-originated transactions. Review the rules and thresholds applied to fintech activity. Sample alerts generated from fintech transactions and evaluate the quality of alert dispositioning. Check for coverage gaps, are there transaction types or channels specific to the fintech product that aren't captured by the monitoring rules?

SAR filing. Review SARs filed from fintech-originated activity. Assess whether the filing volume is proportionate to the fintech's transaction volume and risk profile. Evaluate narrative quality, do SARs include sufficient detail about the suspicious activity, or are they template-driven with minimal specifics? Verify filing timeliness against the 30-calendar-day requirement under 31 CFR § 1020.320.

CTR filing. If the fintech product involves cash transactions (uncommon but possible in certain payment programs), verify that currency transaction reports are filed accurately for transactions exceeding $10,000.

OFAC screening. Verify that all fintech customers and transactions are screened against OFAC's Specially Designated Nationals (SDN) list. Check for false positive resolution procedures and timing of screening (at onboarding and for ongoing transactions).

Consumer Compliance Evaluation

Consumer compliance review focuses on whether the fintech's products and practices comply with applicable consumer protection regulations. The specific regulations depend on the product:

For lending products (TILA/Reg Z, ECOA/Reg B, FCRA):

Pull a sample of loan originations and review disclosures for accuracy and timing. Under Reg Z, initial disclosures must be provided within three business days of application receipt for closed-end credit.
Review the fintech's underwriting model for fair lending compliance. Has the bank obtained a fair lending analysis (disparate impact testing) of the fintech's algorithm? The CFPB and DOJ have made clear that algorithmic underwriting does not exempt lenders from ECOA obligations.
Verify FCRA compliance: adverse action notices are sent when required, contain the correct content, and reference the consumer reporting agency used.

For deposit products (Reg E, Reg DD, EFTA):

Review account opening disclosures for Reg DD compliance: accurate fee schedules, APY disclosure, and minimum balance requirements.
Test Reg E error resolution procedures. Sample disputed transactions and verify that provisional credit is provided within 10 business days, investigations are completed within the allowed timeframes, and customers receive written notification of results.
Review electronic fund transfer disclosures and periodic statements for compliance.

For all products (UDAAP):

Assess whether the fintech's product features, fee structures, or marketing practices could constitute unfair, deceptive, or abusive acts or practices. Look for: hidden fees, confusing terms, dark patterns in the user interface, and practices that exploit behavioral biases.

Complaint Analysis

Complaints are a compliance early warning system. The review should include:

Volume analysis. Total complaints for the review period, broken down by category. Compare to prior periods and to peer benchmarks (if available from other fintech partners or industry data).
Root cause analysis. For complaint categories exceeding thresholds, identify the root cause. Is the issue a product design problem, a disclosure deficiency, a customer service failure, or a fintech system error?
Resolution quality. Sample resolved complaints and evaluate: Was the resolution appropriate? Was it timely? Was the customer notified of the resolution? For Reg E disputes, were regulatory timeframes met?
Regulatory complaint cross-reference. Check the CFPB Consumer Complaint Database for complaints about the fintech's products. If complaints appear in the public database that the bank hasn't received from the fintech, there is a reporting gap.
Trend identification. Are certain complaint types increasing? Do complaints cluster around specific product features, marketing campaigns, or customer segments?

Marketing and Disclosure Review

Marketing review assesses whether the fintech's customer-facing communications comply with regulatory requirements and the bank's brand and compliance standards.

Advertising compliance. Review a sample of the fintech's advertising for compliance with applicable regulations: Reg Z for credit advertising (trigger terms, required disclosures), Reg DD for deposit advertising (APY, minimum balances), and the FTC Act for general truthfulness and non-deception.

FDIC insurance representations. Verify that all references to FDIC insurance accurately identify the bank as the insured institution and do not imply that the fintech itself is FDIC insured. Under 12 CFR Part 328, misuse of the FDIC name or logo is prohibited and enforceable.

Social media and influencer content. If the fintech uses social media or influencer marketing, review a sample for compliance. Influencer content that promotes financial products must include required disclosures and cannot be misleading. This is a growing area of regulatory focus.

Website and app disclosures. Review the fintech's website and mobile app for proper placement and accessibility of required disclosures: terms and conditions, privacy policies (GLBA), electronic disclosure consent (E-SIGN Act), and fee schedules.

Data Security Assessment

The data security review evaluates whether the fintech maintains adequate controls over consumer financial data that the bank is responsible for under GLBA's Safeguards Rule.

SOC 2 Type II review. Request and review the fintech's most recent SOC 2 Type II report. Evaluate any control exceptions or qualifications. If the fintech does not have a SOC 2, this should be a significant finding.
Penetration testing. Review the fintech's most recent external penetration test results. Were critical or high-severity findings remediated within acceptable timeframes?
Incident history. Request a report of all security incidents during the review period. Evaluate the fintech's detection, response, and notification procedures.
Access controls. Assess how the fintech controls access to bank customer data, including role-based access, multi-factor authentication, and access logging.
Vendor security. Evaluate the fintech's own vendor security program, particularly for subcontractors with access to customer data.

Performance Metrics and Operational Review

Beyond compliance-specific areas, the review should assess operational performance indicators that affect the bank's risk exposure:

Volume metrics: Account openings, transaction volumes, loan origination volumes. Are these within expected ranges? Rapid growth may outpace the fintech's compliance controls.
Delinquency and charge-off rates (for lending products): Are they within the parameters established in the partnership agreement?
System availability: Has the fintech met its uptime commitments? Were there outages that affected customers?
Customer service metrics: Response times, resolution rates, escalation volumes. Poor customer service generates complaints and reputational risk.

Documenting Findings and Remediation

The review should produce a written report that includes:

Scope and methodology. What was reviewed, what period was covered, and what sampling methodology was used.
Findings by area. Each finding should identify the regulatory requirement, the deficiency observed, the evidence supporting the finding, and the risk level (high, medium, low).
Risk rating. An updated risk rating for the partner based on review results.
Remediation requirements. For each finding, specify: the corrective action required, the responsible party (bank or fintech), the deadline, and how the bank will verify completion.
Comparison to prior review. Were prior findings remediated? Are there recurring issues?

This report should be presented to the bank's third-party risk management committee and summarized in board reporting. Examiners will request these reports and evaluate whether the bank acted on the findings.

How Canarie Supports Fintech Compliance Reviews

Compliance reviews across multiple fintech partners generate substantial documentation: test results, sample files, finding summaries, remediation tracking, and board reports. Maintaining this in a way that is auditable and examination-ready requires more than file folders.

Canarie turns each review area into a structured workflow with assigned reviewers, checklists, evidence attachments, and finding tracking. When a review is complete, the evidence is already connected to the relevant regulatory obligation and the specific fintech partner, ready for examiners without reconstruction.

See how Canarie turns compliance reviews into exam-ready evidence →

Frequently Asked Questions

How large should the sample size be for transaction testing in a fintech compliance review?

Sample size should be risk-based and statistically meaningful. For high-volume fintech programs, testing every transaction is impractical. A common approach is to use a combination of: random sampling (to assess overall compliance rates), targeted sampling (transactions flagged by monitoring systems, high-value transactions, complaints), and judgmental sampling (new product features, recently changed processes). Regulatory guidance does not prescribe a specific number, but examiners expect the sample to be large enough to support conclusions. For a program originating 10,000 loans per quarter, sampling 50-100 files is a reasonable starting point for consumer compliance testing, with larger samples for targeted BSA reviews.

What should a bank do if it discovers a systemic disclosure error during a compliance review?

The bank must assess the scope of the error (how many customers were affected), determine the regulatory impact (which disclosure requirement was violated), implement an immediate correction to prevent further errors, and develop a remediation plan for affected customers. Depending on the regulation and the nature of the error, the bank may need to provide corrected disclosures, make customers whole for any financial harm, and file regulatory notifications. The bank should also evaluate whether the error resulted from a fintech system issue, a configuration error, or a policy gap, and address the root cause. Document the entire response. Examiners will look favorably on banks that discovered issues through their own monitoring and self-corrected promptly.

How should the bank handle a fintech partner that resists providing information for a compliance review?

A fintech partner's resistance to providing information for a compliance review is itself a significant finding. The bank's contract should include audit rights and information access provisions per OCC Bulletin 2023-17. If the fintech resists despite contractual obligations, the bank should escalate through its third-party oversight framework: formal written request, senior management escalation, and if necessary, activation of contractual remedies including potential termination. A bank that cannot obtain information needed to perform its regulatory obligations cannot maintain the relationship.

Does a fintech compliance review need to be performed by independent reviewers?

The bank's BSA/AML independent testing must be performed by qualified personnel not involved in day-to-day compliance operations, per FinCEN requirements. For other areas of the compliance review, the same principle of objectivity applies: the reviewer should not be the person responsible for managing the fintech relationship day-to-day. However, the review does not need to be performed by an external firm, internal compliance staff who are independent of the fintech program management function can perform the review. For smaller banks where separation of duties is challenging, engaging an outside firm for periodic independent reviews is a practical solution.